If your instructor has assigned the Appendix to this chapter, redo Problem AP7-4B assuming that the company uses a periodic inventory system. Round weighted-average per unit cost to two decimal places.

Data from AP7-4B

At the beginning of its operations in July 2020, Wheaton Pet Shop Ltd. began with 9,500 units of inventory that it purchased at a cost of $15.00 each. The company’s purchases during July were as follows:

July 5 ..........................................    7,500 units @ $18.00

Sales during July:

July 2 ..........................................    8,500 units

July 27 ........................................    5,000 units

Wheaton Pet Shop uses a perpetual inventory system.

Required 

Round calculations to four decimal places.

a. Calculate the cost of goods sold for July using the weighted-average cost formula. Round per unit cost to two decimal places.

b. Calculate the cost of goods sold for July using the first-in, first-out cost formula.

c. Which of the two inventory cost formulas results in the greater gross margin for July?

d. Which of the two inventory cost formulas results in the larger inventory balance at the end of July?

e. Compare your answers in parts “c” and “d” and comment on the relationship between these items.